EU neighbourhood policy thrown off course by Russia

The European Union’s policy towards its eastern neighbours has been thrown into disarray by a decision by Armenia to abandon a pending free-trade agreement with the EU.

Armenia is instead joining the Russian-led Eurasian Customs Union. The change of heart comes as a blow to the EU’s Eastern Partnership programme, formed in 2009 in an attempt to encourage ex-Soviet states to move towards the EU.

Russia has launched a diplomatic counter-offensive against the EU, aimed at preventing the EU from gaining more influence over its neighbours. It explicitly linked a trade dispute with Ukraine last month to that country’s plan to sign agreements with the EU.

Polish MEP Jacek Saryusz-Wolski, who has drafted a resolution in the European Parliament condemning Russian pressure, yesterday warned that its success with Armenia could have a “domino effect” on more of the EU’s eastern neighbours.

The EU has repeatedly said that it views membership of the Eurasian Customs Union as “incompatible” with the type of deep and wide-ranging trade deals that Armenia and Ukraine have been seeking with the EU.

Armenia completed technical preparations for such a deal in July. An agreement was to have been sealed in November at a summit meeting of leaders from the EU and the six countries of the Eastern Partnership.

The summit is billed as a flagship event of Lithuania’s presidency of the Council of Ministers.

As well as Armenia and Ukraine, the EU was hoping for agreements with Georgia and Moldova. No progress is expected with the partnership’s other members, Azerbaijan and Belarus.

Saryusz-Wolski pointed to a statement made yesterday by Georgia’s President Bidzina Ivanishvili, when he was asked whether Georgia would consider joining the Eurasian Customs Union. Ivanishvili said: “If…we see that it is interesting for our country, then why not? But at this stage we have no position.”

EU sources said that they were still trying to ascertain why Armenia’s President Serzh Sarkisian abandoned his ambitions for a trade agreement with the EU within the space of four days, following a demand from Russia’s President Vladimir Putin on Friday (30 August) for an immediate meeting.

However, Sarkisian’s decision on Tuesday (3 September) came days after Putin signed a €3 billion arms agreement with Azerbaijan, lending credence to suggestions that Sarkisian feared losing Russian backing in Armenia’s ‘frozen conflict’ with Azerbaijan over Nagorno-Karabakh.

Sweden’s foreign minister, Carl Bildt, said yesterday (4 September) that Moscow had engaged in a “dangerous game” in the Caucasus.

An official privy to EU consultations said that one of the primary considerations in the EU’s deliberations was how to avoid lending “ammunition” to Russia in its geopolitical battle with the EU.

Russia explicitly linked its decision to restrict exports from Ukraine in August to the EU’s offer of free trade and other benefits to Ukraine. An adviser to Putin described the move as a warning to Ukraine not to take the “suicidal” step of signing association and trade agreements with the EU in November.

Ukraine says that the flow of exports to Russia is now returning to normal, but Russia has officially said that it may reassess rules affecting the many Ukrainians who work in Russia.

Russia’s pressure on Ukraine has led to a call from Pawel Kowal, the Polish chairman of the European Parliament’s delegation to Ukraine, for the EU to sign trade and political agreements with Ukraine immediately, before the Eastern Partnership summit in Vilnius.

EU officials expect Russia to apply further pressure in the coming months. Gunnar Wiegand, the EU diplomat responsible for relations with the EU’s eastern neighbours, told the European Parliament last week (28 August) that the clash with Ukraine was “likely to be a first warning shot” to Ukraine.

One EU source suggested that, cumulatively, Russia’s pressure on Ukraine and Armenia amounts to Russia’s biggest challenge to the EU in the neighbourhood since the EU enlarged to include eight formerly communist states in 2004.

The EU responded to Russia’s pressure on Ukraine by saying that Ukraine and Russia should resolve their disputes in the World Trade Organization.

Olga Shumylo-Tapiola of the Brussels-based think-tank Carnegie Europe said the EU was right to put the Ukraine-Russia dispute “into the international or European framework” of legal norms and trade rules. “I don’t think that to fight politically with Russia makes much sense; that is Russia’s game,” she said. “The EU has to use the instruments that it has.”